Was the “great retreat” just a “great break”?

As the Covid pandemic intensified in 2020, many late-career employees decided they had simply had enough. Their shift to working from home and mastering new virtual technologies — and their growing sense of isolation from the workplace — has driven millions of Americans into retirement in droves.

Yet, seemingly overnight, the factors driving decisions to leave the workforce changed: inflation emerged as a potential long-term challenge, diminishing the purchasing power of retirement savings. Stock markets are no longer inflating these nest eggs as major indexes fall from recent highs. And the savings accumulated during the pandemic are rapidly diminishing. The personal savings rate, which is the amount of income a household saves each month, climbed to 34% in April 2020, but has steadily fallen, reaching around 6.5% last winter.

In a survey by online research firm Momentive last winter, just 21% of adults said their finances were better than a year ago. And nearly 90% of respondents say they are at least “somewhat concerned” about inflation, according to the New York Times.

With finances not looking as strong as they did a year or two ago, many people are rethinking their choices and considering how they might re-enter the workforce. Ric Edelman, co-founder of Edelman Financial Engines, one of the largest RIA companies in the country, suggests that many people have simply embarked on a “premature sabbatical”.

Just as advisors helped clients weigh the merits and challenges of early retirement, we are now called upon to help sort through clients’ options as resumes are dusted and a new job search looms. then.

Sam Englander, a client of mine who worked in the human resources department of a Fortune 500 technology company for 16½ years, had a difficult job search, despite his impressive resume. “I see that there may be a gap between my past salary levels and experience and what I see in the job market,” he says. Additionally, potential young recruits “can be exposed to the latest technology and skills.”

As anyone who has been out of work for a long time can attest, staying focused and positive is a major challenge. Sam says he “maintained a pattern and rhythm that keeps me busy and engaged.” What he misses the most is “the opportunity to interact with colleagues on a daily basis,” he says.

For this period of unemployment for people like Sam, “it’s time to recalibrate your goals and your needs,” says Jim Emanuel, adviser to the Society for Human Resource Management (SHRM). “Do you need to earn the same income as before?” he asks. A willingness to take a pay cut can open the door to more job offers.

While Sam worries he’s “overqualified” for many of the job openings he sees, Emanuel says Sam should “leverage his stability, proven longevity, and commitment.” These are characteristics that young “job seekers” cannot always demonstrate. (Incidentally, the word “overqualified” isn’t widely used anymore, as it’s considered a form of age discrimination.)

Emanuel emphasizes that people should use the time between jobs productively, by volunteering, taking classes, earning certifications, or doing freelance work. “This approach will keep you busy and provide valuable talking points when you meet with a recruiter or hiring manager,” he says.

Those on an extended job search (like Sam) are likely worried about “gaps” in their resumes since their last job ended. While this stigma was an obvious problem in the past, attitudes are changing. A survey by job site Monster at the end of 2020 found that 49% of U.S. recruiters believed gaps in resumes had become more acceptable and were no longer just red flags. This is especially the case in today’s labor market, where more than 11 million open jobs remain unfilled.

“Having a job gap is not a deciding factor,” Emanuel notes. “But if you let it interfere with your mindset and your self-confidence, it could keep you from landing the job. Focus on showcasing your accomplishments and the valuable skills you bring to the table. »

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